Viral particles preferentially incorporate extra- and intracellular constituents of host cell lipid rafts, a phenomenon central to pseudotyping. Based on this mechanism, we have developed a system for the predictable decoration of enveloped viruses with functionally active cytokines that circumvents the need to modify viral proteins themselves. Human interleukin-2 (hIL-2), hIL-4, human granulocyte-macrophage colony-stimulating factor (hGM-CSF), and murine IL-2 (mIL-2) were used as model cytokines and fused at their C terminus to the glycosylphosphatidylinositol (GPI) acceptor sequence of human Fcgamma receptor III (CD16b). We show here that genetically modified cytokines are all well expressed on 293 producer cells. However, only molecules equipped with GPI anchors but not those linked to transmembrane/intracellular regions of type I membrane proteins are efficiently targeted to lipid rafts and consequently to virus-like particles (VLP) induced by Moloney murine leukemia virus Gag-Pol. hIL-4::GPI and hGM-CSF::GPI coexpressed on VLP were found to differentiate monocytes towards dendritic cells. Apart from myeloid-committed cell types, VLP-bound cytokines also act efficiently on lymphocytes. hIL-2::GPI strongly costimulated T-cell receptor (TCR)/CD3 dependent T-cell activation in vitro and mIL-2::GPI-coactivated antigen-specific T cells in vivo. On a molar basis, the functional activity of VLP-bound hIL-2::GPI was found to be comparable to that of soluble hIL-2. VLP decorated with hIL-2::GPI and coexpressing a TCR/CD3 ligand have an IL-2-specific activity of 5 x 10(4) units/mg protein. Virus particles decorated with lipid-modified cytokines might help to improve viral strains for vaccination purposes, the propagation of factor-dependent cell types, as well as gene transfer by viral systems in the future.